US Wheat Review on Tuesday: Finishes lower after two-sided session

 

 

U.S. wheat futures settled slightly lower Tuesday in a setback from early strength and despite late gains in neighboring corn and soy.

 

Chicago Board of Trade December wheat ended down 1/4 cent at US$4.55 3/4 a bushel. Kansas City Board of Trade December wheat slipped 3/4 cent to US$4.68 1/4, and Minneapolis Grain Exchange December wheat dropped 2 1/2 cents to US$4.90 3/4.

 

CBOT wheat closed lower for the fifth consecutive session. The December contract closed off its high of US$4.64 1/2 but above its low of US$4.52 3/4.

 

There was a lack of fresh supportive news to sustain early gains, traders said. Trading remained range-bound with a lack of strong direction, they said.

 

Global fundamentals are well known by this point, a trader said. World supplies are seen as large, and export demand for U.S. wheat started off slow this marketing year.

 

Worries about the potential for frost in Australia attracted some attention as the wheat crop is in a critical period for development, said Dave Marshall, an independent marketing advisor and commodities broker. Australian producers "really don't need a really cold snap at the point," he said. However, wheat did not have enough "giddy-up" to hang on to early gains, a trader said.

 

Wheat closed lower despite late gains in CBOT corn and soy, which have been providing leadership to wheat. Commodity funds were buyers of the row crops and seen as even in CBOT wheat.

 

 

Kansas City Board of Trade

 

KCBT wheat closed lower in quiet, two-sided trading. The market lacked fundamental news to rally, traders said.

 

Dryness is still a concern across portions of Australia's wheat belt, but rains have improved conditions during the past few weeks, according to MDA EarthSat Weather. Dryness persists across most of the wheat belt in South Australia, far northern Victoria, New South Wales, and Queensland, the private weather firm said. Australia has historically been a top world exporter of wheat.

 

 

Minneapolis Grain Exchange

 

MGE wheat closed lower with the other markets. Traders are watching the U.S. spring wheat harvest advance, with yields coming in strong and protein coming in low, as expected.

 

The average protein for hard red spring wheat cut in North Dakota, the top spring wheat-growing state, is 13.5% so far, below the average of 14.3%. That's according to the North Dakota Wheat Commission, which says North Dakota State University's Wheat Quality Lab has analyzed about two-thirds of the 300 harvest samples it expects to test.

 

A lack of heat stress on the crop this summer lowered protein. Protein also usually suffers when yields are high.